Retirement Answers

Hello, and welcome to Retirement Answers. My name is Jacob Duke. I am a certified financial planner based in Little Rock, Arkansas working with clients all throughout the South. Thank you for tuning in to today's show. As I often say, this is designed and built for folks who are about to retire or are already in retirement, and the goal is to help simplify that in such a way that you can understand what is going on with your money and why you are doing what you're doing.

I think there's so much noise out there in the world and so many different opinions and just a lot of information in general. And so for you as a normal person, that's just hard to make sense of any of it, and so you don't really know what to do. And so my goal is to give you clear, concise information and education in such a way that you can make wise decisions about you and your family's money. So, today, just wanted to take a little bit of time and talk about a question that I got from a client recently, and it revolves around the COLA, cost of living adjustments for Social Security benefits. And the question the heart of the question was, I'm not taking my benefit yet.

Should I start taking my benefit this year so that I can receive the 8.3% adjustment that is gonna happen at the, you know, at the end of this year? And the question I totally understand, and the hard part about it for me was that this person came to me. They're a client of mine. And they came to me, and they said that the Social Security office here in my city told them that they have to be already receiving their benefits in order to get that adjustment. And that is just completely not true.

You do not have to be receiving your benefits in order to get the cost of living adjustments, but there's something that you should know. You do, by the end of the year in which the adjustment is being, allocated, you do have to be of age 62. Okay? So if you're under 62, you are not eligible for the cost of living adjustment that year. Now going back to the fact that you don't have to be actually taking your benefits, that's a big deal.

Right? Because most people are hoping to get the most out of Social Security as they possibly can, and so what that typically means is delaying it past 62 in order to get their full benefit at their FRA or full retirement age. And so that's the situation here. This client, he is 62 years old, and he has chosen. We've we've planned out and and done that in such a way where, hey, we think the best option is to gonna be to delay that Social Security into the future, live off some different cash and other funds for now so that we can get the most out of our our Social Security benefit for us and our spouse.

And and so we're delaying that. So his question was, should I be taking should I start taking it now so that I make sure I get that increase at the end of twenty twenty two, the 8.3% COLA adjustment? And so he did not wanna miss out on that. I totally understand. So he went to the social Social Security Administration office and asked them that question.

They said that, yes, you do need to be taking it. And I he came to me and I said, no. You do not need to be taking it. I found a bunch of other sources to kinda back up my belief on that and kinda understanding of it. And and and and the fact is you simply do not have to be taking your benefit in order to get the cost living adjustment.

Now going back to what I said, you do need to be of age 62. So if you're age 64 and you are not taking your benefit because you're delaying it into the future, you do not have to take that benefit and you are of age 62. Therefore, you will get that 8.3 cost living adjustment this year. So, that's a a big question that I think a lot of folks are kinda worried about right now here at the end of twenty twenty two going into 2023. And I think that that is something that we that we just need to simply know that, hey, don't rush and take your benefits simply to get that cost of living adjustment whenever you actually don't have to.

So I hope that is somewhat helpful and that that client question actually is one of the ones maybe you've had before or someone else you know has had. Just know that you do not have to take that benefit. As long as you're age 62, you do qualify for the COLA, and you're good to go. So continue to delay that, build up that benefit, get that 8% annual increase on your Social Security benefit, and keep rocking and rolling that way. So hope that is a helpful tip, and that question is one that you've had in the past, and I was just able to answer it for you.

I appreciate you tuning in to today's show. As always, feel free to subscribe if these have been helpful. Share this with those, that that you feel like might benefit from it. And, other than that, I appreciate you being here, and we will see you next week.